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Why China FAW Group's Business Model is so successful?

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China FAW Group’s Company Overview


FAW Group Corporation is a Chinese State-owned automotive manufacturing company headquartered in Changchun, Jilin, China. Its principal products are automobiles; buses; light, medium, and heavy-duty trucks; and auto parts. FAW became China's first automobile manufacturer when it unveiled the nation's first domestically produced passenger car, the Hong Qi, in 1958. FAW is one of the "Big Four" Chinese automakers alongside Chang'a Motors, Dongfeng Motor, and SAIC Motor. In 2014, the company ranked third in terms of output making 2.7 million whole vehicles.

www.faw.com

Country: Jilin

Foundations date: 1953

Type: State-owned

Sector: Industrials

Categories: Automotive


China FAW Group’s Customer Needs


Social impact:

Life changing: self-actualization

Emotional: design/aesthetics, badge value, attractiveness, provides access, rewards me

Functional: saves time, connects, reduces effort, avoids hassles, quality, variety


China FAW Group’s Related Competitors



China FAW Group’s Business Operations


Add-on:

An additional item offered to a customer of a primary product or service is referred to as an add-on sale. Depending on the industry, add-on sales may generate substantial income and profits for a firm. For example, when a customer has decided to purchase the core product or service, the salesman at an automotive dealership will usually offer an add-on sale. The pattern is used in the price of new software programs based on access to new features, number of users, and so forth.

Brands consortium:

A collection of brands that coexist under the auspices of a parent business. The businesses in this pattern develop, produce, and market equipment. Their strength is in copywriting. Occasionally used to refer to a short-term agreement in which many companies (from the same or other industrial sectors or countries) combine their financial and personnel resources to execute a significant project benefiting all group members.

Cross-subsidiary:

When products and goods and products and services are integrated, they form a subsidiary side and a money side, maximizing the overall revenue impact. A subsidiary is a firm owned entirely or in part by another business, referred to as the parent company or holding company. A parent company with subsidiaries is a kind of conglomerate, a corporation that consists of several distinct companies; sometimes, the national or worldwide dispersion of the offices necessitates the establishment of subsidiaries.

Direct selling:

Direct selling refers to a situation in which a company's goods are immediately accessible from the manufacturer or service provider rather than via intermediate channels. The business avoids the retail margin and any extra expenses connected with the intermediaries in this manner. These savings may be passed on to the client, establishing a consistent sales experience. Furthermore, such intimate touch may help to strengthen client connections. Finally, direct selling benefits consumers by providing convenience and service, such as personal demonstrations and explanations of goods, home delivery, and substantial satisfaction guarantees.

Dynamic branding:

Dynamic branding is a technique for refreshing your identity without totally altering it. You can link to anything; you may modify the logo according to the seasons or for a particular event. It has been proven effective many times. However, it does not work for every business.

State-owned:

As rivals or subjects of study, Chinese businesses' emergence on the world stage necessitates or creates a new category of business models: state-owned enterprises. These enterprises typically do not exist for profit but rather to offer critical goods and services to society that cannot be supplied economically by established firms. This model is characterized by fixed pricing, monopoly access to consumers, an advantage in exploiting resources, minimal or no tax obligations, and recurring financial losses.

Performance-based contracting:

Performance-based contracting (PBC), sometimes referred to as performance-based logistics (PBL) or performance-based acquisition, is a method for achieving quantifiable supplier performance. A PBC strategy focuses on developing strategic performance measures and the direct correlation of contract payment to success against these criteria. Availability, dependability, maintainability, supportability, and total cost of ownership are all standard criteria. This is accomplished mainly via incentive-based, long-term contracts with precise and quantifiable operational performance targets set by the client and agreed upon by contractual parties.

Make and distribute:

In this arrangement, the producer creates the product and distributes it to distributors, who oversee the goods' ongoing management in the market.

Lock-in:

The lock-in strategy?in which a business locks in consumers by imposing a high barrier to transferring to a competitor?has acquired new traction with New Economy firms during the last decade.

Solution provider:

A solution provider consolidates all goods and services in a particular domain into a single point of contact. As a result, the client is supplied with a unique know-how to improve efficiency and performance. As a Solution Provider, a business may avoid revenue loss by broadening the scope of the service it offers, which adds value to the product. Additionally, close client interaction enables a better understanding of the customer's habits and requirements, enhancing goods and services.

Supply chain:

A supply chain is a network of companies, people, activities, data, and resources that facilitate the movement of goods and services from supplier to consumer. The supply chain processes natural resources, raw materials, and components into a completed product supplied to the ultimate consumer. In addition, used goods may re-enter the distribution network at any point where residual value is recyclable in advanced supply chain systems. Thus, value chains are connected through supply chains.

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